Super Group Draws Praise Ahead of SPAC Deal Closing
Sports Entertainment Acquisition Corp. (NYSE:SEAH), the special aim acquisition fellowship (SPAC) merging with Betway parent Super Group, is earning kudos from a sell-side. That indicates there’s some enthusiasm for what’s potential to follow ane of the 4th quarter’s largest blank-check deals.
In a line to clients today, Benchmark analyst Mike Hickey starts insurance coverage of Sports Entertainment Acquisition with a “buy” rating and a $16 terms target, implying upside of 45.45 percent from the Nov. 29 close. That coverage will carry-over to Super Group when it becomes a standalone public entity. The blank-check transaction is slated to come together inwards the current canton and the gaming operator will trade in on the New York Stock Exchange below the ticker “SGHC.”
The psychoanalyst forecasts ongoing ontogenesis for the worldwide online gaming market, noting Super Group’s “highly profitable” net political platform and pragmatical come near to gaining part inwards unexampled markets give it “a winning chemical formula for on-going success.”
When the blank-check transaction was proclaimed inward April, the Betway parent said the business deal had a pre-equity valuation of $4.75 billion. That indicates Super Group’s merger with Sports Entertainment represents ace of the largest combinations to particular date between a SPAC and a gaming company.
Reasons to Believe Hickey Is Right
With shares of so many deSPACed companies faltering, including several inwards the gaming industry, analysts and investors are increasing scrutiny on balance sheets and financial sturdiness.
While Super Group is coming to marketplace at a time of waning enthusiasm for gaming SPAC deals, in that respect are reasons to believe Hickey’s bullish assessment is warranted. As noted above, the troupe is profitable — a infrequency among online sportsbook operators.
Super Group calculate $1.5 1000000000000 of mesh gaming revenue (NGR) this year, with earnings before interest, taxes, wear and tear and amortization (EBITDA) of $350 million. Those figures are expected to tumesce to $1.7 billion and $420 million, respectively, next year.
Following the gag law of the sell with Sports Entertainment, Super Group will have got $200 one thousand thousand inwards immediate payment on its counterbalance piece of paper and no debt.
Inside Super Group Thesis
For investors, a potentiality source of allure with Super Group is that the company isn’t aiming to graduated table Betway to FanDuel or DraftKings levels inward the US. That implies it doesn’t need to operate inward a cash-sapping outlay war simply to gain marketplace share.
Still, the operator has US development plans. When the blank-check dealing was announced, Super Group also said it’s getting Digital Gaming Corp. (DGC). The purchase of DGC brings added market get at of upwardly to 10 states, including Colorado, Indiana, Iowa, New Jersey, and Pennsylvania, and that could be applicable to both iGaming and sports wagering, according to the company.
Malta-based Betway has more than 60 trademark agreements with athletes, leagues, and teams around the world. In the US, such accords include the NBA’s Brooklyn Nets, Chicago Bulls, Golden State Warriors, and the Los Angeles Clippers.
It’s non like a shot open when Super Group will do its NYSE debut. But the lastly month of 2021 could live fussy for gaming SPAC deals closing. Codere Online, a Latin American iGaming and sports wagering firm, debuts on the Nasdaq tomorrow, and Tilman Fertitta’s Fertitta Entertainment is expected to over(p) a merger with FAST Acquisition (NYSE:FST) inwards the current quarter.